Adviser surveys

Investors are increasingly moving away from cash and reallocating back to equities. The percentage of advisers reporting that their clients are now investing or considering investing - having previously held cash – has risen to 67%, a notable increase from 49% in May.

This trend aligns with advisers' anticipated allocation strategies for the coming twelve months, which highlights a clear move away from cash. On balance, advisers anticipate increasing their allocations to UK equities and developed international equities by the greatest amount.

Advisers are cautiously optimistic about market performance, with 23% expecting higher equity returns compared with long-term historical averages. Additionally, 57% anticipate increased global growth. However, this optimism is tempered by concerns over potential volatility, with 70% expecting heightened geopolitical disruptions over the next five years and 43% predicting higher market volatility.

The current environment may have affected client sentiment, as the percentage of advisers reporting a bullish outlook among their clients has decreased to 34%, down from 41% in May 2024. Nonetheless, this figure remains markedly higher than the 17% recorded in November 2023.

Regulation continues to be the primary concern for advisers as we move into 2025. This issue has steadily increased in importance, rising from 32% in 2022 to 49% in 2023. A significant contributing factor has been the introduction of The Consumer Duty, with 42% of advisers now believing it will have a high or reasonably high impact on their business, compared with 25% two months before its introduction back in May 2023.

The survey highlighted a continuing concern among advisers regarding intergenerational wealth transfer, with 62% concerned about losing assets as wealth transfers across the generations. Just over half (53%) are reporting an increase in the average age of their clients over the past five years.

Artificial intelligence (AI) remains high on the agenda for advisers. Encouragingly, more advisers are adopting AI, with only 10% stating they do not expect to utilise it, a significant decrease from 27% in May 2023. Additionally, the survey revealed that 21% have already implemented some form of AI technology.